When energy prices crash, the pain doesn't show up in the unemployment numbers right away. That's the trap — by the time unemployment spikes, the economic damage has been building for months. Here's how the shockwave travels:
Global energy prices fall due to oversupply, demand collapse, or geopolitical shifts. Alberta's benchmark (WCS) follows.
Oil companies slash capital spending. Rig counts plunge. Exploration budgets get shelved. Service companies lose contracts overnight.
Field workers, rig crews, pipeline contractors — the direct energy workforce starts getting layoff notices. Camps empty out.
The workers who used to eat out, buy trucks, and rent apartments are now cutting back or leaving town. Local businesses feel the squeeze.
Reduced foot traffic hits the service economy. Part-time workers lose shifts. Small businesses start closing. THIS is when unemployment peaks.
Notice how unemployment LAGS energy price drops by several months
AB Unemployment Rate
Avg Weekly Earnings